By Kristy Dorsey
UK retail sales clocked up the strongest quarterly growth on record during the three months to June as the sector continued to bounce back from the severest of lockdown restrictions.
The figures from the monthly retail sales monitor produced by the British Retail Consortium (BRC) and accountancy group KPMG showed that while growth in food sales slowed, non-food sales were bolstered by the continued unleashing of consumer demand as more of the economy has opened up. Fashion and footwear did well in the first part of June, while the start of Euro 2020 provided a boost for TVs, snack food and beer.
However, BRC chief executive Helen Dickinson cautioned that headwinds still exist, with the recovery in some locations more subdued than others.
Equivalent sales figures from the Scottish Retail Consortium (SRC) will not be published for another several days, but the group’s footfall monitor released last week showed that the number of shoppers on the high streets and malls stalled during June. The decline of nearly 5 per cent on the previous month was “very different” from elsewhere in the UK, and according to the SRC could have potentially been the result of the pause in relaxing Covid restrictions north of the Border.
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Across the UK, food sales during the three months to the end of June rose by 7.9 per cent. This was above the total average growth of 1.4% recorded in 2019, which the BRC is using for “more meaningful comparisons” than would be the case if measured against the turbulence of 2020.
Sales of non-food items rose by 12.4%, compared to a decline of 1.3% for the same period in 2019. For the month of June, non-food was in year-on-year growth.
“Nonetheless, UK retail is still facing strong headwinds with many retailers still making up for ground lost during the previous lockdowns,” Ms Dickinson said. “City centre retailers continue to suffer low footfall and spending as commuters and international tourist numbers remained well below pre-pandemic levels.”
She added that “consumer comfort with the next stage” to ending lockdown will be key to the ongoing success of retail. All but a few Covid restrictions are due to be lifted in England from July 19, while the First Minister is scheduled to provide an update today on Scotland’s move to Level Zero, which is due to take place on the same day.
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“Many customers are looking forward to a return to a more normal shopping experience, while others may be discouraged by the change in face covering rules,” Ms Dickinson said. “The Government will need to reassure the public on safety, while pushing forward with its hugely successful vaccination programme.
“The public will also need to be understanding of one another during the easing of restrictions; there has been a big rise in violence and abuse against retail workers during the pandemic and colleagues cannot be put in the firing line because of this change in policy.”
On a monthly basis, total sales in June were 13.1% higher than in the same period two years earlier. The increase of 17% on a like-for-like basis was inflated by online sales, which play a far greater role in like-for-like comparisons.
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Paul Martin, head of retail at KPMG, said the “fight for share of wallet” is now underway, with the re-opening of the hospitality and leisure sectors diluting retail spending.
“Whilst the high street saw continued growth in June, with sales up 10%, online sales fell back by 7% compared to June 2020,” he continued. “However, penetration rates for online sales remain much higher than their pre-pandemic levels, suggesting the shift to online is here to stay.
“Sales of men and women’s clothing and footwear have started to recover with double-digit growth across all channels, but there were unsurprising declines across those categories which had seen a boom in lockdown, such as technology and home accessories and furnishings.”
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